According to a Infonetics Research, telecom operators worldwide will hold on their cash for the year 2010. Capital expenditure (capex) will touch rock bottom in 2010. Global capex is forecast to decline at most 6% in 2009, claims the research.
The new investment cycle will start in 2011, driven by 3G rollouts in India, and central and Latin America; the start of 3G rollouts in Africa; and a ramp-up in LTE deployments in Australia, Brazil, western Europe, Japan, and North America.
“Global telecom service provider capital expenditures hit a plateau in 2008, marking the end of a 5 year investment cycle and the beginning of a 3 year disinvestment cycle, albeit a less dramatic one than what followed the great telecom crash of 2000. Capex will bottom down in 2010,” predicts Stephane Teral, principal analyst, mobile and FMC infrastructure, Infonetics Research.
In the year 2008 SP, worldwide spent $305 bn on capital expenditure projects, mostly on network infrastructure upgrades. Global capex is forecast to decline mainly due to a significant capex shakeout in the Middle East and Africa, a weakening US dollar, expected declines in the Brazil real and Mexican peso, and delays in the US broadband stimulus funding. Infonetics anticipates a year-end bump up in capex, which can bring the overall capex decline in 2009 to less than 6%.
Mainly due to the currency effects, worldwide service provider revenue is forecast to decline only very slightly in 2009, to $1.67 tn, driven by mobile communication services, as consumers continue to hold on to their mobile services during tough economic times. Mobile infrastructure will continue to dominate the total global telecom and datacom spending, followed by voice equipment.
“Optical network hardware is a bright spot in today's tightened capex environment, with a decent single-digit percent spending growth expected in 2009, despite currency devaluations,” says Stephane.
Akhilesh Shukla
akhileshs@cybermedia.co.in
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